77 Wis. 501 | Wis. | 1890
On the 2d day of January, 1889, one Eoyal S. Eeynolds, being insolvent, made a voluntary assignment of all his property to the respondent, for the benefit of his creditors. At that time he had on deposit in the appellant bank, to his credit, the sum of $773.13. At the same time the said bank held and owned the promissory note of said Eeynolds for $1,000, executed by him to one S. Martindale, and indorsed to said bank by said Martindale, on the 3d day of July, 1888, to become due twenty days after date, with interest at eight per cent, per annum, and to bear ten per cent, interest after due. The time of payment of said note had been extended from time to time by the said Eey-nolds paying the interest thereon in advance to such times; and finally, on the 6th day of December, 1888, the said Eeynolds paid the interest thereon and the time of payment thereof was extended to the 31st day of January, 1889, so that at the date of said assignment said note was not yet due.
The respondent assignee demanded of the bank the payment of said deposit, and the bank refused, claiming, and still claims in this suit, that the note set off and canceled the deposit. Whether the said note had been so extended was a question of fact on the trial, but the jury found that
The learned counsel of the appellant contends that by virtue of a bank’s equitable lien upon the deposit of its customer, as security for the payment of his indebtedness to the bank, and by virtue of an equitable setoff of one against the other in case of the customer’s insolvency, a court of equity will decree such an application of what he owes to the bank, due or not due, although it might not be strictly a legal setoff. There is not only plausibility in this claim, but it seems to be sustained by some respectable authorities. This was never allowed at common law, but it seems to have long prevailed in cases of bankruptcy, according to Carr v. Hamilton, 129 U. S. 255. It is difficult to see why a bank should have this exceptional advantage over an individual creditor. By our statute (R. S. sec. 4258) the set-off in all cases must be due, and it makes no exception in favor of banks or on account of insolvency; and by our law of voluntary assignments all creditors must be treated alike, and their rights are fixed at the date of the assignment. Union Nat. Bank v. Hicks, 67 Wis. 189. In Armstrong v. Pratt, 2 Wis. 299, the defendant sought to set off
There might be special equities growing out of the transaction itself, through fraud or matters of trust, that might make an exception in favor of a bank, but mere insolvency of the debtor is no ground for such an exception; and, if the insolvent debtor has made an assignment for the benefit of his creditors, the reason is strong the other way. The-learned counsel of the appellant cites 1 Morse, Banks, § 337, to the general doctrine that, “ for any indebtedness accruing from the customer, the bank has the right of setoff,” etc.. In Jordan v. Nat. S. & L. Bank, 14 N. Y. 467, the court says that Mr. Morse has stated the rule too broadly, and that the bank has a lien on the funds of the depositor in its possession for the balance of the general account, if that balcmoe is clue and payable. The following authorities are cited in the brief of the learned counsel of the respondent as sustaining the rule that the demand claimed to be a set-off in such a case must have matured before the date of the assignment: Bradley v. Angel, 3 N. Y. 475; Beckwith v. Union Bank, 9 N. Y. 211; Myers v. Davis, 22 N. Y. 489; Martin v. Kunzmuller, 37 N. Y. 396; Roberts v. Carter, 38 N. Y. 107; Jordan v. Wat. S. & L. Bank, 74 N. Y. 467; Newcomb v. Almy, 96 N. Y. 308; Richards v. La Tourette,
By the Qoxvrt.— The judgment of the circuit court is affirmed.